Saturday, February 08, 2014

Toby Connor provides very interesting technical view on the general markets, Commodities, Gold and Silver. Nobody can find inflation these days and his take on the final rise and bust in the general markets is very intriguing. Our own observations confirm the CRB - Commodities Index breakout and that Gold is knocking on the $1270 with huge break out to the upside after that. Supply and Demand picture provides further support to the technical observations in Gold and Silver markets these days. Where the Gold will come from in the future with China record buying continued? M&A activity will be driving the next Bull market in Gold and Silver miners.

"With general equity markets sliding into the territory which will challenge Bernanke's Happy Exit with Tapering, time is to listen to those who have seen and have done it. Rob McEwen is dissecting the recent market situation in Gold and M&A activity, which will make the best stories in the market to move very fast from the bottom. McEwen Mining has bottomed at $1.65 in December and has closed at $2.63 last Friday. Los Azules Copper project will be the one of the coming M&A stories this year, which will move valuations of McEwen Mining and TNR Gold. TNR Gold holds shares of McEwen Mining after the settlement on Los Azules. Rob McEwen has announced on Twitter about the commencement of drilling in Nevada now. With Gold crossing $1270 and closing just below it we have a very exciting time for the best stories in junior mining these days."

"ZeroHedge presents Gold Miners Sector and Gold supply chain as we are searching for the answer: where the Gold will come from in the future? A lot of miners are at the break-even levels with this level of Gold price and are cutting back on new project development and exploration. Juniors are cut off from the capital markets and only the strongest will survive. With record amount of Gold flowing from West to the East and China now being the top consumer of Gold we have the almost perfect set up for the much higher Gold prices.Junior miners with the best stories can represent the life time buying opportunity in these markets. Goldcorp hostile bid for Osisko is the very good indication of the major bottom in the market. Among our "Golden Nuggets" McEwen Mining has received the last permit for its El Gallo 2 minedevelopment in Mexico. Rob McEwen has addressed these developments recently, presenting his progress in Mexico, Argentina and Nevada. He has discussed at length the questions of resource nationalism and miss-guided "rear view mirror" mining sector policies around the world in his recent interview. Safe mining jurisdictions like Alaska in case with TNR Gold Shotgun deposit will gain the more attraction from the industry in the new cycle."

For over a year now I've been expecting 2014 to be the year when the unintended consequences of five years of QE come home to roost. By the end of the year we are going to have a massive inflationary spike in commodity prices that will collapse the global economy. It's all going to start with a final manic melt up phase in the stock market over the next 3-4 months. Make no mistake, this bull market will not be over until the NASDAQ tests it's all time high above 5000.

Over the next 3-4 months we are going to see the public pile into the stock market exactly like they did with tech stocks in 2000, and real estate in 2005.Completing the final bubble phase in the stock market is the first component necessary for the Great Inflation. During this period commodities are going to start to rise in a stealth rally that everyone will ignore because they will be focused on the stock market. The CRB has already broken out of its three-year downtrend.

At some point later this year, probably in May or early June the stock market parabola will collapse. This is the second component necessary to initiate the Great Inflation. When the crash begins the inflation stored in stocks will flow into the commodity markets. This process will be exacerbated as Yellen reverses the taper and doubles down on QE to try and reflate the stock market bubble. This will be like throwing gasoline on a fire, and will drive commodity prices through the roof into the end of the year and probably the spring of 2015.

The Fed is going to make the exact same mistake they did during the last decade. Their easy monetary policy has produced a bubble in stocks just like it produced a bubble in real estate in 2005. When the bubble implodes the Fed will try to reflate. They won't succeed in reflating the broken stock market parabola, but it will trigger an explosion in commodity prices. The rapid spike in commodity prices will collapse the global economy just like it did in 2008.

Because the artificial and manipulated bear market of the last year has severely damaged the supply side of the market, I expect the precious metals will be the largest beneficiary during the Great Inflation of 2014.

By this time next year all of the Chinese/Russians/Indians, etc. who have been scooping up gold over the last year are going to look like geniuses."

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SRSrocco reports on further deterioration of the COMEX Gold inventories available for deliveries. You can guess who is taking now a...

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Dedicated to all those brave men who have been fighting the bear market in 2000 and buying the dips without understanding that they were looking straight into the abyss. Do not trust your money in anybody, for you are the one who is going to be rich or poor, not those that are advising you: always do your DD. Disclosure: We are putting our money where our mouth is.